A Ca2+ indicator has been synthesized and characterized which can be used to monitor rapid changes in the free Ca2+ concentration ([Ca2+]) immediately adjacent to cell membranes. This indicator, referred to as C18-Fura-2, consists of a Fura-2 molecule conjugated to a lipophilic alkyl chain which will insert into cell membranes. When associated with cell membranes in low concentrations, C18-Fura-2 exhibits an excitation spectrum with a large Stokes shift and a single isobestic point, thus [Ca2+] can be calculated ratiometrically. The apparent Ca2+ dissociation constant of cell-associated C18-Fura-2 is around 150 nM. C18-Fura-2 orients in the cell membrane so that the fluorophore is facing the side to which it was applied. C18-Fura-2 was used to record rapid changes in intracellular [Ca2+] which occurred in response to membrane depolarization in isolated smooth muscle cells. The initial rise of the [Ca2+] transient reported by C18-Fura-2 was four to six times faster than the rise of the [Ca2+] transient reported by cytosolic Fura-2. This result suggests that C18-Fura-2 was located at the plasma membrane near sites of Ca2+ influx and indicates that membrane-associated Ca2+ indicators can be used to detect rapid, localized changes in [Ca2+] which are obscured in signals recorded using water-soluble, bulk cytosolic fluorescent Ca2+ indicators.